Posted Monday, August 1, 2005 6:49 PM | Contributed by Jeff
Net revenues for the quarter ended June 26, 2005, increased 3% to $148.9 million from $145.0 million in 2004, on a 3% increase in average in-park guest per capita spending and a decrease of 2%, or approximately 62,000 visits, in combined attendance. Over this same period, out-of-park revenues, including resort hotels, increased 8%, or $2.1 million.
Read the press release from Cedar Fair.
The GL news isn't tragic, but far less than great. An attendance increase of 7% in July (read the long GL quote carefully) does not equal a 7% increase for the season. Frankly, even a 7% seasonal increase wouldn't bring the park back into the million annual visitor range.
But this doesn't mean CF management is somehow failing. It's the economy...especially around Detroit. Okay--Ohio's has been stinking for a while, but Detroit's change precipitates CP's attendance drop. The domestic auto industry is in a deep funk and the real estate market is one of the ten most likely to face a downturn. But bear in mind the chain's less profitable, not losing money.
For whatever reason, they are not at last year’s attendance levels. I’ve seen nothing that would indicate that the economy is the issue. It does not look like they were that far off with the projections. A good August might get them back near original expectations.
Anyhow, you are correct in pointing out that they are making money---just not as much as last year at this point in time!
P.S. Demographic movement has got to be a long term concern for CF as their parks are concentrated in states that are slowly losing electoral votes. I assume this is at least a small reason that you've seen the push for national exposure...
Buy now, while the price is lower.
Here's another: Take the nationwide consumer confidence drop and imagine how that plays out in a city like Detroit--where maybe you haven't lost your job for an auto company or one of their many suppliers, but you're not so sure you won't.
See how that makes a difference?
DP up 10% - kinda par for the course with a new major ride
MiA up 15% - Wet stuff power! But remember, their attendance is smaller
CP down 4% - they're promoting / discounting heavily in Detroit
GL down 5% - yes, down 5% YTD from last year's numbers
VF down 4% - Hard to follow Foam Ball Factory, I guess! :)
WOF down 11% - but waterpark attendance is up
KBF down 6% - roughly 110,000 guests
Jack Falfas and the head of the Tri-County Building trades sat down for lunch last Monday and ironed out their differences. CF management estimates they may have lost as many as 30-40,000 guests in Ohio and Michigan over their disagreement.
DP season pass sales were up, CP's were down, others were essentially flat.
CP attendance still troubles me. I've been saying for several years that per cap spending going up is all fine and dandy but they have to curb the attendance erosion.
GL down 5% tells but up in July tells me that what I thought would happen did happen. People waited until the waterpark opened before making their trip.
30K-40K drop in guests because of the union dispute seems high to me. I hope that is accurate but I suspect it is an inflated excuse. Admitedly, Geauga Lake really relies on corporate outings.
VF's numbers don't shock but Worlds of Fun? Wow. Big drop there. I am a little surprised that KBF hasn't seen some residuals from the Disney anniversary but I've been reading that California Adventure is having its worst year yet.
I wonder if the company is starting to feel the effects in Season Pass sales of waiting too long to hype the next big attraction? I'm not sure the average guest gets all caught up in the internet speculation and perhaps they would be more likely to buy a season pass at the end of the season if they saw big promotions of what was happening next year instead of reading about it in the cold of winter.*** This post was edited by wahoo skipper 8/2/2005 2:26:34 PM ***
A 4% drop at VF this year from a 7% the year before basically equals roughly a 10% total drop from SV's installation. If anything, I suppose that either indicates SV's sustained drawing power or the additional appeal of Foam Ball Factory and the Rockin' Tug. I couldn't tell you which.
Consumer confidence dropped unexpectedly in July, breaking a three-month winning streak
I see nothing that indicates a poor "economy" from the link! I can’t believe a one-month statistical anomaly would serve as explanation for CF's missed targets. At the very least, this type of conclusion would be quite a reach…
In fact, your link seems to back my take when they say...
"The overall state of the economy remains healthy and consumers' outlook suggests no storm clouds on the short-term horizon," Franco said in a statement. "Even the steady upward tick of fuel prices at the pump has done relatively little to dampen consumers' spirits.
I find more in your link to support my opinion than anything...Maybe we just see it differently!
I've no interest in confrontation if all we have is a differing of opinion. If you have actual data that shows Ohio and Michigan are in a recession, then I can see your point. As it stands now, I've seen nothing that would indicate this to be true. If I get the time, I'll try to find a link for some stuff I was reading last week in which the "so-called-experts" showed data to suggest economic growth in all 50 states!
I just think blaming CF's missed targets on the economy is most likely off base! You may be correct, but I believe there are probably better explanations given the data I've seen, or not seen(including your link)!
Maybe I'm reading your take wrong. I can see how "fear of losing" your job may have an impact on spending. I've been looking more at actual data of jobs lost/per capita income/etc as my baseline. There is no real way to determine how an emotional component like "fear" may play into this...but I grant that it most certainly does!
Anyhow, in terms of CF park placement, this side of Knott's, it would appear that their parks are concentrated in areas that rely heavily on manufacturing/union work. If your opinion is indeed correct, then...?
Ever lived in Detroit when one of the auto companies were going through a shakeup? Even one of them--like Chrysler during the Daimler 'merger'--much less a time when two of the three are in the crapper?
That would give you some real-life data far beyond some statistic.
*** This post was edited by CoastaPlaya 8/2/2005 4:41:22 PM ***
Playa...good point about the two gates and I didn't take into account the brutal month they have had with heat at W.O.F.
And just because you don't lose your job doesn't mean you lose that 4 hours a day of overtime you're used to spending OR lose a bigger chunk of your paycheck to health care even before deductibles or both.
I can tell you that Knott's best year (attendance wise) was Disney's 30th, and getting people who came for the LA Olympics in 1984. They've never had that attendance peak since, even though one might argue they are more profitable now with additions such as Soak City, the hotel, and TGI Fridays.
I think it's time for Cedar Point to start thinking differently. Ditch the ad agency too. They've built this expectation over the last 20 years that they're always going to build the biggest and best, and you just can't expect to do that forever. PKI knew this and that's why their attendance is on the rise year after year. maXair was a step in the right direction.
Geauga Lake is totally about the water park, and if you visit the park this year you'll see that's true. When phase II is done next year there's no doubt in my mind that they'll see continued growth, and hopefully they'll get done on time. The late start this year certainly didn't help.
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